https://www.listennotes.com/e/9f363aeb354b4123be58ba611d627dfa

2017 RISD alumni and also co-chair of the RISD Venture Committee, which is part of the RISD Founders and Entrepreneurs Affinity Group. Tonight, we are hosting this panel event to talk about the entrepreneurial ecosystem and discussing how founders and investors intersect for building successful companies. I want to bring together this panel of experts with firsthand experience in building, investing in, and supporting companies along the entrepreneurial journey. I would like to thank the panelists, my co-chair Rebecca Ruth and John Sheehan, Daniele Codella, Codella, and the Alumni Relations team and all of you that are joining us tonight. Before we get started, I want to share our agenda for tonight's discussion. I encourage all of you in the audience to participate in asking questions for our panelists by tapping in them into the Q&A box. We will have time to answer questions afterwards. Please note that we are recording this event to share with our community. Now, I would like to go around and have the panelists take a couple of minutes to introduce themselves. Let's start with Tom and Traci Hazard. Please.

Thank you, Hena. Hey there, everyone. I'm Tracy Hazard and that's my partner and husband, Tom Hazard. And we met at RISTI. We literally met our first day at RISTI. So we've been working together, friends and business partners for over 34 years. Oh gosh, 34 years. So Tom, go ahead.

So yeah, so you know, Tracy is right. The very first day of RISD we met and I'm lucky that we're still together because I insulted her on that first day. But anyway, yeah, we've spent our careers together both as, you know, having several businesses and being consultants for other businesses, designing and developing consumer products for most of our career and then currently in a bit of a different chapter instead of designing a product, we've designed a business in the podcasting space, which has really taken off. So that's what we're doing these days.

Yeah, so I'm the CEO and Tom is the CTO and we're the founders of Poditize. It is a family-run business. Our oldest daughter is also in the business. So we have a C O O and we are predominantly female-owned. because of that. And so that helps out, you know, even things out with Tom. But Podetize is really a podcasting production and service company, marketing as a service, as we would call it, in combination with software as a service, which it also has, which is its hosting platform and the technology that we use to drive ads and other things. So we've been running it since 2017. Well, technically before, but 2017 in its current formation. And we have well over 600 clients and thousands who have used the platform and thousands of episodes that get produced all the time, millions of listeners that listen to those episodes. So it's been quite fun to be exploring how to design services and technology, not just product, although there is product coming in the next few months. Hina, you're muted.

Thank you, wonderful. Howard, would you please go next?

Sure. So my name is Howard Rosenberg and I'm a 1987 RISD architecture grad. I practiced as an architect for well over 10 years with Cone Pedersen Fox in both New York and London. and with Lendlease, an international contractor who sent me around the world to work on really large projects like airports and skyscraper projects. Then I went back to school and earned an MBA from Cambridge University. And then my entrepreneurial career really took off. I landed at a global law firm where I was able to leverage my creative problem solving abilities that I learned from being an architect. and then my newly acquired financial and marketing skills from the MBA. And that opportunity really enabled me to become a CEO and co-founder of two successful startup businesses, both of which got acquired.

Great. Will, would you please go next?

Yeah. Thank you, Ina. Hi, guys. My name is Wale Salami and I'm proud to say I'm the only non-alumni alumni member of the panel. I hope by the end of the program I'll probably get an honorary degree from RISD. My name is Wallace Salami. I'm an angel investor, venture capitalist, and I am founder and executive director of the Midwestern Angel Network, which is a network of accredited minority non-traditional angel investors. And we try to, we link angel investors in the Dallas Fort Worth area with early stage startups and high growth companies in North America and Africa. What we try to do is to build a bridge between North America and Africa. And prior to starting the Midwestern Angel Network, I was a A veteran of the US Army. I served with the US Army stationed in Fort Hood, Texas and I'm currently based in the Dallas area. Thank you, Hina.

You're welcome, welcome. And you're not alone. Stephen is also an NRI alum that we welcome all of you. So Stephen, would you please finish off the introduction?

Hi, Hina. Thank you. My name is Steve Holmes. I'm the managing partner of Barlow Josephson Homes, we're a small boutique intellectual property firm located right downtown Providence. I've been practicing intellectual property law for approximately 30 years right in downtown Providence. We represent everybody from small individual investors to small companies to Fortune 500 companies. You know, over the years we've represented many, many, many small individual investors and smaller companies in trying to secure intellectual property and then leverage that in certain business opportunities to accelerate growth and market share. Tom and Tracy were among my first clients about 30 years ago. Probably about 29 of those 30 years ago. They had invented a stylus for use what was then the go-to handheld device, the Palm Pilot. We were able to secure some coverage for them way, way back, and they leveraged that into a very successful business that I believe they went on to sell and moved on to another business after that.

Actually, there was a trademark, I think, in there too, Steve, which I remember you saying was one of the better trademarks you would remember coming through your firm at the time. So trademarks and patents. Steve is the guy.

Wonderful. It is so great to have all of you here today. I'd like to kick off this discussion with a roundtable question for all of you. This question is, what is the most important lesson that you have learned from your past entrepreneurial experience that would be helpful to share with the RIZZY entrepreneurial community. So I would give each of you for about two minutes and now I leave it up to you who would like to go first.

All right, well, nobody's jumping in, so I unmuted myself. I'll start.

Great.

So I think one of the biggest lessons that I learned that I think would be helpful for everybody is really to learn that hope is not a strategy. And that's actually one of my mantras, these I often share that with people, with other entrepreneurs. Hoping something's gonna happen, waiting for it to happen, is leaving your fate in the hands of others. And I firmly believe that ideas are cheap, concepts are cheap. You need to, and I'll say the difference between people that really make it, And those that don't are the ones that take action quickly on their ideas and put them into practice. So there's a lot around that, but basically hope is not a strategy or hope is not a plan. I'll leave it there.

To just leap off of that is for us, that sort of idea that you need to take action, that you need to keep going, means bootstrapping and doing everything you can while you might be doing other things like seeking capital or doing whatever it is, finding someone to buy your patent or whatever it is that your goals are. You're taking action along the way. One of the most important things that if I learned really early on is that if I'm going to spend any money of my own or I'm going to spend a lot of my time and energy, the thing that I should concentrate the most on is making sure that I'm establishing product market fit. And what I say with that is meaning that the market wants to buy what you have to sell. So the product I'm using really loosely here, it could mean a service, it could mean a technology, it could mean an actual physical product, it could mean a piece of art, right? So any of those things. But making sure that the market really wants to buy that, they're easy to access and find the people who want to buy it and make sure that there's a fit, that they actually want that. If you can prove that along the way, Everything else really flows. Money flows, customers flow. A lot of times you don't even need the capital because you end up with as many customers that you've established yourself actually really quickly if you can get that part right. So if you're gonna spend any time taking action, any money taking that action, put it into the product market fit. That's what I learned the most.

Wonderful.

Tina, this is Steve. I'm gonna jump in and piggyback on Tom's, concept of hope is hoping for things to happen when you start a business is not a real way to go. One of the things that I've tried to stress to people when they come in and they're looking for advice is to take advantage of any resources that you have, friends, colleagues, people who are willing to give you advice. When you start a business, there are hundreds, if not thousands, of questions that need to be answered, things that you're just not an expert on and you can't be an expert on. So whenever you have the opportunity to go out and ask for people's help, throw a question at them to see if you can get some quick answers or at least to have them guide you in the right direction. get them to help you push that freight train that you just got behind and you're starting to push because starting a business is like pushing a freight train. It's not an easy thing to do and you have to be persistent every day and try to make those things happen. Especially nowadays with the current market and COVID, everything is more difficult now and the more help you can get, to push yourself along, the better off you'll be.

Let me piggyback off of Steven because I think you have to have an inner passion. You have to have that drive because being the life of an entrepreneur, you're not going to have the days are long and you're not always going to have good days and there are lots of bad days and you have to have that drive otherwise you're not going to make it. So I think you have to have a real degree of resiliency and believe in your idea more so than anyone else because it's your business otherwise it doesn't happen.

Great, to add to what I would just said, I would share like four lessons. I think the first one is to accept failure as part of the process, as part of the journey. I mean do not beat yourself down, you need to get out of your own way. you know, if you fail, just, just keep moving, you know, because crying over it wouldn't correct, wouldn't do a cost correction. Like, go back to the drawing board, see what went wrong and learn from it and move on. Second one is keep your eyes open for new opportunities. They are always there. I think, I think it was Mark Zuckerberg that said, no, no ideas come fully made. You know, during the entrepreneurial journey, you're going to make lots of believers. Like, just be open, be flexible to changes. Three, never stop creating. Like, keep, like, keep creating. Like, because it's, it's the, it's the way out of the all. That's the only way you can find a product market fit, like Tracy said, you know, and it's your way to, like, get it to the next, to the next space. And fourth, believe in yourself. I can't say, like, I can't always emphasize that, you know, entrepreneurship is about you. And the whole world thinking you're crazy and you saying, yes, I'm just going with the flow and keep believing in yourself. Never doubt yourself. And lastly, you know, be ready to give something back to the world. I mean, once you get to the top, I mean, make sure you pass the ladder down. Do not, I mean, it's always a cycle, so always be ready to give back.

Wonderful. Thank you. Thank you. all of you. And I would also be curious to hear your question towards each other as we go through this session. And that would be fun. And so for now, I would like to hear more from Tricia and Tom, because I know you are serial entrepreneurs and you... So I would like to hear more of about your experience with interacting with investors from the founder's perspective? What are the some key pieces of the device for other entrepreneurs to consider when looking for outside investments?

Well, Hena, thank you for that question. I'm just really going to sort of set the table here for Tracy to answer that because in our business, we divide and conquer. We're co-owners. Yeah, she's the CEO. At the end of the day, one person has to ultimately be in charge. And in our case, that's Tracy. And in that role, over the last more than a year, at least year and a half, maybe, it's been Tracy's primary responsibility to chart our path for growth and to pitch to investors to even figure out what kind of investment we were interested in and willing to take. And she's learned a whole lot. So I'm going to get out of the way and let Tracy take this one.

Well, and it's not the first time, right, Tom? So, I mean, the first time when Steve was talking about the stylus pens or handheld computers that we did for Palm Pilots way back when, we had 13 angel investors. And so I learned a lot that in those early days in my early 20s, running a business and answering to 13 different people. who had loaned us small amounts of money, you know, between 10 and $50,000. And, you know, and looking at that and saying, do I want to do that again? Was a question that I asked myself this time because it was actually really intensive, something that I didn't, I didn't have quite the bandwidth experience to have handled in, you know, mid-20s. It was just a lot to figure out how to interact with those investors. And they came rather easily. at that time because the Palm Pilot community was kind of hot and the family that I brought in all brought these friends, right? And so it was actually really simple for us to get those angel investors. Not like I did a bunch of pitching and all those things. Not that I didn't build a plan and do the pitches and all those things we did back then, but it was a little easier because they already had a really warm introduction to us and we knew them. They knew us or at least knew of us enough to say, yeah, this sounds like something I want to invest in. So now we were able to parlay that into success, sell everything off. We sold it often actually into pieces. So we actually return the investment to our investors in just a very different way by completely selling off all the intellectual property. So it's like not investing your company, but actually doing it at a profit. And so there was a really different model. From that point on, we really didn't want to take investors. And it's not that there was anything wrong with that back then. It's just that it takes a lot of time and energy to run a company, right? You gotta have a lot of stamina, resilience, all the things that, Howard and Wally were talking about just now, right? Like all of those things really matter. And sometimes investment seeking on it is a job in itself. And that's really for the last 18 months, that's what I've been doing in this current business. But we remember we've been in business since 2017 and we already have a very established business that's over a million dollars in revenue. You know, so it was doing, you know, we were in profit already. And we decided that we wanted to use capital to accelerate the business. So we had a plan for that acceleration of growth. And so building a plan and doing those things was going to be my full-time job because it was going to make everybody's life easier. And so we were able to, because we also have 84, 87, I don't even know how many, 87, I think, employees around the world right now. So we've got a large staff and it freed me up to be able to spend the majority of my time working on this investment raising strategy. And what I learned over the last year and a half is that it's very different if you want a $100,000, that's actually its own model. If you want a million dollars, it's almost impossible. If you wanna get in that middle part, it's easier to raise $10 million than it is to raise a million. And so there's just this kind of different model of there's less people looking to spend a million, more people who would do a hundred thousand, a lot more, there's different types of VC groups, you have lots of different choices of groups when you get over 10 million. So it's just a different model of looking at how to raise. What I learned through the process though is that if you're not selective about it, if you are not as choosy as the people who are, you're pitching to, then you're making a mistake. You need to be as, you're vetting them just as they're vetting you. And you need to have that value based idea of who you're looking for. What are you looking for in addition to money? Right? Am I looking for someone who gets me, who gets my plan, who gets where we're going in our business? Or am I just simply having somebody who just wants to make some quick money off the top and is moving onto another investment and we're going to be in and out of this in a year or two years with them. That's okay. You just need to understand what that looks like because at the end of the day, a partnership with a capital investor of any kind, whether they're Angel, VC, whatever they are, it's a sacred trust. and so I am entrusting my business, my model of it, into someone else's hands who's bringing in that capital and that capital deserves value as well. So we have to look at it from a respectful standpoint. So at the end of the day, if someone looks back at us and says, oh, that invention, like, I don't care. I'm gonna make some money and I'm gonna run on it, but I don't care about the thing, the whatever the thing is. And if that's the case, then maybe that's not for you. So we had some things in our plan about creating a creator economy that we are working towards. And if they didn't understand that, didn't value that and didn't feel that that was an okay spend of their capital, then it wasn't going to be a good fit for us because there would be resentment along the way as decisions were made. So we need to find that right fit for us in the capital raising process and find investors who fit us just as much as we need their capital. They also need our ideas and they need our business and we have to have a mutual respect going on in order for it to be successful there. Because at the end of the day, most of them treat it like the journey of their money, right? So they care about how their money is going to make money, right? And so if that path that you want to take is not one they're comfortable with, then it's never going to work out.

Very, very inspiring. And helpful. Thank you. So now I would like to go to Howard. I know Howard is also a serial entrepreneur and also an angel investor. So I would like to hear your perspective having had experience on both sides of the table. What are some important takeaways from your experience that you would like to share with the RISD community?

Thanks, Tina. So I think because of my weird and wonderful background of being both an entrepreneur and an investor, I've.

Come to.

The conclusion that there's four areas about raising money, kind of four takeaways. I think number one, there's no one size fits all. What Tracy was saying is that you've got crowdfunding, you've got angel investment, there's VCs, there's friends and family, there's microloans, bootstrapping, and any degree of money kind of straddles all that. I can say that it's much easier to raise $10 million than raising $100,000. There's no question about that. There's no economies of scale when it comes to to raising financing. Number two, it takes much, much, much longer than you would think. Even if you have a track record and you have had a successful exit or two, it's just a very long process. And I mean, some say it takes about three to six months. My experience is about double that. It's just very, very, very long. You've got to date a lot of people. You've got to kiss a lot of frogs. to find the one that's right. And what Tracy was saying, I think you've got to find someone that's, it's not just the money. The money's great, but you've got to find someone that can help you facilitate helping those valuable introductions to potential clients and customers. And so it's not just dead money, but it is a whole, you're embedded with someone for a long term and it is a sacred position that you're in there for the long haul. Number three, I think it's painful, some would say it's demoralizing because you're asking for money. My training as an architect was just perfect for this because I think, you know, in the RISD studio environment where you're, you know, you have your work savaged by critics, you kind of, you know, kind of cut you down and, you know, build you back up and you're a better person, you're a better your project is better because of that. There's a lot of similarities about being an entrepreneur when you're actually raising money like that. And number four, I think you've got to have a really compelling story and communicate it with a heavy dose of passion and conviction because it's so noisy out there. There's other people doing a whole variety of things. You have to stand out. It's really challenging to stand out, so you have to have a real passion to do it, but you've got to find a way to Convey that concept in a storytelling fashion because that's what resonates with people and investors.

Great. Thank you, Howard. Now I would like to go to Will. Since Will, you've built a network of angel investors. So my second question for you is, Are there any strategies that help ensure your success as an angel investor?

Oh yeah, as an angel investor, I think for me there are six strategies that I work with. And the first is to look for how to discover great companies, you know, because you get like we get tons of emails of pitch decks and all that, you know, you need to know how to like sift through all of that to get, you know, that idea that you feel is going to catch fire, I mean, during the execution and all that. And that is very, very key, you know. Yeah, because I mean, once you find all you need is, you know, according to data, right, in Angel Investor there's this the 110 and one rule where you vet 100 projects, 100 startups, you invest in 10 and you only want succeeds, right? That's the industry standard, right? And that's very shocking, you know, but it's the reality, you know. So for me, I'm always looking for that one and, you know, The reality is most angel investors portfolios aren't that bad. It's not 10 to 1. We do like say 6 to 10, right? But that's what the data says. Number two is learning how to manage risk. Risk management is very, very important. And what can help is a third strategy, having diverse portfolio. you know, I mean, at Midlothian Energy Network, we are perfectly agnostic. I mean, we, we invest in several, several sector. We're in Agritech, we're in EdTech, we invest in transports, you know, I mean, whatever I solving, whatever we believe, you know, it's a need, you know, and it has a big Market. We actually, like, put our funds behind it. And another strategy is you know, having a realistic expectation when it comes to timing and size of your exit, you know, I think that is very, very key to the success of the Angel Network. Fifth is, you know, we don't just invest money, we also invest in human capital. And that's one of the beauty of Angel Network because we can't, I mean, I have folks in my network who work at some of the Fortune 500 companies.

Right?

And we have some of these startups who, you know, they might not be direct competitors, right? But they could benefit from some of their skills. So majority of our angel members serve as mentors to some of these founders. The last would be to really succeed as an angel investor, you need to have a very good way of keeping track of your investment portfolio. That is very, very important. Managing the investors, knowing how to push updates because you should be getting updates from the portfolio companies and knowing who to send it to and all of that is very key.

So.

Could you also share some insights into what angel investors are looking for?

Yeah.

What companies they should invest in.

I thought you weren't gonna ask that because that's very, that's very important question. I think for me, there's, there are several things out there. And like I said, there's no one size fits all. Right. Each angel investor would have different strategies. For me, there are three, there are seven things I look at. The first is, I mean, who is behind this product? I'm talking about the founder, the quality of the founder and the management team. That is very, very key. For me, that is even more important than the idea, because ideas are 10 for a dollar. Anyone can come up with an idea, but it takes the right combination of skills, drive, experience, and temperament to grow a business and to execute. and do it well. Number two would be, is the market big enough? Sometimes there are opportunities that are on the sub needs, you know, but is it big enough for, for you to scale? Because Angel investing and Venture Capital is about high growth companies, you know, so we have to ensure that the market is, is big enough. Three would be positive early traction. I mean, achieved by that particular startup. what are the numbers? I mean, between in the last quarter, in the last six months, what exactly have you done? You know, most times, these are tough questions for most founders to answer. But, I mean, for me, I have to see those numbers, if I can decide whether I'm gonna back you or not.

The.

Fourth point would be passion for the long haul. You need to actually, you know, check with the founder, like, do you have what it takes to go the longer? you know, because, I mean, these days you see some folks, they just want to start an idea and they are willing to, like, they're waiting for someone else to, like, buy and all of that stuff. So for me, I like Founders who are ready for the long. It doesn't mean if you see an acquisition, we wouldn't. I mean, they can't sell, but, you know, I like, you know, checking for that. Fifth to be. Do they even understand the, the key financial metrics of that business and what are the potential risk for the business? And last, which is very, very important, which would be my last point, is the use of fund, you know, and, you know, this, this can be a lot of, I mean, it can cause a lot of issues for, for most funders. I, i once, there was a guy I wanted to fund, I think i'm from, from germany. He was from the, from eu. And I asked him, so what do you plan? He was gonna raise five hundred thousand dollars, right? right in prison. So what do you want to use with this one? Tom, luckily for him, you know, it was part of his life. And he showed me remuneration 20%.

I'm like.

Are you kidding me? I mean, angel investing is not about funding your lifestyle as a, as a founder. So we don't want to see that. Like, we, we are, we are not saying you shouldn't get remunerated. well, I mean, at this particular stage of your business, there are some lifestyles that the business can't afford. So, yeah, so that is very, very key.

Great. It seems this resonates a lot with our other panelists here. I would like to hear more of your feedback later after we hear Stephen's perspective. So, Stephen, I would like to hear what are some of the most important things to consider for investors that are looking to provide funding to a company?

So from a legal standpoint, which is most of what I see, from.

The.

Points that I'm going to raise are probably equally applicable to both founders and investors is one of the biggest issues that we come across kind of later in the stage of companies being developed is the founders have not set up a solid legal structure for their company, whether it be a partnership, a limited liability company, they've just kind of jumped out of the gates with their idea, start to run with it, start to do all the things that are necessary to bring either a product or a service to market. And one of the things that gets left behind because it's difficult is sitting down at the table and discussing with your partners, others that are going to be involved with the business, how the business is going to be run. how the profit's gonna be split, who's gonna be responsible for what activities. And if you don't have a solid operating agreement to start from, when you do become successful later on, those conversations become that much more difficult. And it also makes it more difficult if there's ever a falling out, one partner wants to buy the other partner out, there's no strategies or mechanisms in.

Place.

Set up beforehand and discussed by all the parties where you can make a comfortable exit instead of having, you know, kind of the business blow up on you if you don't agree with how your partners later on. So that's one of the biggest issues for both investors and founders is that the investors are going to, at some point when they take a look and do their due diligence. They're going to look to make sure that you have some kind of operating agreement and solid structure in place that if they get into business with you, that all of these, you know, all of these factors are going to be taken into account at a later date. The other biggest issue that we see is a trademark clearance later on in the process. There's nothing worse then starting a business with a great catchy name, getting out there six to 12 months, and then getting a cease and desist letter in the mail saying this trademark is too close to our business. We're not happy with you. And at that point in your, you know, kind of life cycle of your business, you are not likely to have the resources to defend yourself against somebody who may be bigger and have more resources than you. So, a full kind of a forced rebranding later on. And the process is not where you want to be six months or 12 months out or two years out after you become somewhat successful and gain some recognition and gain the name for yourself. So, that's one of the other biggest issues is make sure that if you're going to pick a name and brand a product that you do some research, some serious research. And it's more important to do the research to make sure that the name is clear than it is to necessarily spend money securing a trademark application, although we do highly recommend that. But the research to make sure that you're not stepping on somebody else's toes is probably the more important part of that. Third, the importance of intellectual property in terms of patents and exclusivity in a particular market if you're branding a product. A lot of the businesses that are starting up now, a lot of them are service-based businesses that are difficult to secure IP protection for from a software standpoint. But if you are marketing a product and there's a possibility that you can have some patent protection on it, we highly recommend that you do everything possible to try to secure that early in the process. I spoke with a startup this morning who was not in their first round of funding, but in subsequent rounds. It might be in the second, third round of funding. And one of the questions that she asked me was, the investors are asking if we have any IP and whether we have any patent applications. And I don't have an answer for them, which is what prompted their phone call to to me this morning. So that's one thing from a founder standpoint, your investors are going to be looking for that. And from an investor standpoint, you want to see that from your founders to see that they've evaluated the status of their product in the marketplace, whether there is exclusivity that can be gained from filing applications, and whether that IP, if they secure it, is beneficial to maintaining a market share or excluding other people from getting into the market. So those are my top three points that most people come to us with. And most of the issues that we see later in the process is some of these things haven't been taken care of early enough and they become an issue later on. So we like to counsel people to try to take care of those three things. early in the process and try to avoid those issues later on.

Tina, I just want to say something because Stephen and Tom and I have worked together for a long time, obviously, as we said earlier. But it's been our experience and we learned this very early on from him that the intellectual property can really raise the valuation of your business. It can really make a big difference. And so we have always put that as a strategy of everything we do, even when we're doing consulting work for our clients, making sure that we're putting intellectual property into that so that those clients get a benefit as well. And it has turned out extremely well for them. And that valuation makes a big difference at the end of the day. And intellectual property is one of those things you can really base that on.

Hanna, you're muted again.

I see. Thank you. Perfect time to jump in and to respond to each other's perspectives. I would like to hear your perspective. And now we also, while we are hearing your conversation between each other, we're also taking Questions from our audience? Are there anything that you would like to? Yes, so for the audience, Wei, please, please, please feel free to type your questions into the Q&A box so that we can answer them. And I would like to see if you would like to comment on each other's perspectives. If not, then I'm curious to hear, I have more questions that I would like to hear from you.

Well, until something else shows up, I really think what Steven shared, his first point is really important for people to, I wanna make sure it landed well on everybody attending now or maybe watching this in a recording. The name of your entity, your brand name, these are really important things that need and deserve a lot of attention. Having said that, it's also something that doesn't, it's not always a linear process. Okay. To say, I want to figure out that name, and I'm going to go figure it out. Case in point, our current company, brand name, potatize. This is the third. brand name of this business that we've started about five years ago, that we're fortunate that we were able to test it out and rebrand ourselves a couple of times and get to something that not only we were able to get a registered trademark on, it went through pretty quickly, but that really works well as a brand resonates within our industry. It makes total sense to the target market. It doesn't always work that way just because you want it to, but it is very, very important. And you definitely want to make sure you're not stepping on somebody else's toes because if they have more power than you, they're going to drive you right out of it. And a big part of your business plan is sort of shut the heck. so there's a question in the Q&A for me and Tracy. Do you see that, Tracy?

I do. I do. So what do we wish we would have learned on the business side of things from my education at RISTI? Wow, there's a lot. I'll go first time, then I'll let you jump in. So, I mean, I wish I had financial and business literacy. It did not come with my textile design education. I'm sure that they thought I was going to, you know, work in a studio in New York or whatever that was. It just, it's not how my business, how my life worked out. I was lucky enough to my first job out of college to go into a leadership orientation program. So I worked for a milliken and company, and they had a leadership orientation program, and I took a week of statistical process control, and most designers would have just like gone back home and said, this job is not for me. Instead, I thought, this is the coolest thing I've ever learned in my entire life. I didn't know that there was such a thing. And so being able to read a p&l, being able to read a balance sheet, being able to understand that, what I really, that I got on the job. And I wish I could have gotten that earlier so that I at least could have had the foundational pieces because once I like really got a handle on what this meant and what was really important in Um, ratios within my business, where the profit margins were, what these things meant. Once I understood that, then I learned how to be creative with it. And that's really the thing that I think that us RISD grads have an advantage at. We have design process thinking. So when I look at these things on a balance sheet or on my profit and loss and I see what's going on there, I'm always thinking about how can I change things? so that this is more profitable. And how can I take risk out of the factors that are going on here from what someone else's sees? How can I prove that those risks aren't really there? Because sometimes financial risks that happen in the early days of your startup, the way your financials look in year one is completely different than they're gonna look in year 10. But how can I give them some proof now to make it easier for them to loan me money? invest in me, whatever that might be, how can I take those away and get some proof in there? Because to me, seven out of 10 failures and in the product world as well as the investment world, that's actually a really common number. There are seven out of 10 failures all the time in the products we used to design for the mass market. And Tom and I said, if we have seven out of 10 failures and we're designing products for a for Martha Stewart or for Costco or for any of the companies that we've designed over the years, and we did 250 products, and we had seven out of 10 failures, we'd actually never make enough income. We'd never hit that profit margin. It's untenable for us. So how do we change that? And Tom and I changed that over time to being eight out of 10 wins from every design we did. And we did that by Removing these risks by understanding these financials so deeply that we could build in profit as well so that we could invest what we needed into making them successful. So wherever those failure points was, we could remove all those factors. So getting creative with that because of a better foundation, I really wish I had that at RISD.

Let me jump in there because I think this question really does resonate with me as well. And I've had a different experience than Tracy. But, you know, being practicing as an architect for a lot of years, I was at a point in my career that while I was a good designer, I don't think I was a great, great designer. And so whenever I attended these client meetings and trying to learn more about the business side of the, you know.

The.

Financial side of the business, I don't think clients took me seriously. I mean, I didn't have the vocabulary to really converse with the developers and the owners of the land and how they're going to develop it going forward. And so I felt that if I wanted a seat at the table, I really had to go back to school and get armed with finance, marketing, business development, statistics, and all those things that RISD just didn't teach me or I didn't get exposed to. So I had to go through more of a formal process. But to trace this point, once I got that under my belt, it was game on because I was handsomely rewarded by looking at things in a very creative way and a very formal environment with other people who are not coming from a creative background at all. You know, there are bean counters. they have other skills and abilities, but the creative problem solving ability is in very short supply, at least in the business world. And I have made an entire career on that premise, which has been really interesting. It's been really fascinating, but that wasn't the original game plan, but it's all worked out beautifully. But to the point of, there's another side of the whole creative process, and that is the business side of it. and you have to know both. Otherwise, you're just not going to make it no matter what you're doing. So that's all I wanted to say.

Yeah, it's very helpful to our creative community to thrive in the business world as well. We have another two questions. This one goes to Stefan. Can you give some examples of intellectual property that are patentable and what might not be?

Sure. It's actually a very common question. So from a patent standpoint, any product, chemical process and some methods are patentable. So, I mean, if you want to look at it as a physical product, are usually, they're at least in the realm of what can be patented, whether they're truly novel. So one of the standards for patentability has to be unknown. You can't, a product has to be new, novel, and unobvious to those people skilled in the art. So if you've come up with a new product, that very well could be patentable. Methodologies are patentable to the extent that they integrate themselves with physical hardware, physical hardware. So methodologies to say, for example, monitor blood glucose. If you come up with a new sensor, a new way to monitor blood sugar level, through the skin and as a new, maybe some kind of LED or some kind of device that you'd wear and then you integrate that with a piece of software. The method of retrieving that data, analyzing it, and then displaying it to a smartphone could very well be patentable. Some of the things that we have difficulty now with, there was a Supreme Court decision several years back that indicated that certain abstract ideas could not be patented anymore. I mean, the big examples back then were a lot of the banking industries were coming up with different ways to incentivize people to save money. So they were trying to patent simple methods of if I go to the store, And I buy $4.49 worth of groceries, do I want to round up that $4.49 to $5 and deposit the 51 cents into my savings account? Now that's a method of incentivizing people to save money, but they eventually found that ideas like that weren't patentable. And so that carries through to a lot of the, data analytic platforms that are out there now. We have a lot of startup activity in Rhode Island and the insurance and the healthcare industry where with the abundance of data that is out there and accessible now, people are finding all kinds of new ways to get people to interact with platforms to input data, to then combine that with other data, and then use that to market products and services. Those types of activities now are not currently what's considered patentable subject matter. They're categorized into that abstract idea classification where if it's a mental process that can be done without a computer and the computer just makes it easier, then it's not likely to be patentable. But otherwise, most things, if they're new and novel and nobody's done them before, we can certainly take a look at and there may be some subject matter there.

Great. And we have another question that is to all the panelists. And then I have another one to Will specifically. So this question to all the panelists, are how much and in what ways is financial due diligence conducted to increase confidence in an investment? Actually, there's many layers of question. What is the best way to present financials to investors? Are there any general tips on pitching to stand out?

Tracy, you want to take a swing at that one? You got a lot of experience with that lately.

I do.

I do.

So, I mean, first off, I mean, I don't know about what everyone else's experience is, but if they didn't ask for financial due diligence, I would not do a deal with them. Like they should. So it should be a part of it. It, you know, it, it needs to be, you know, that they're, they're doing their job as an investor. Otherwise, you know, you wonder what kind of other deals they've gotten into, which actually can backfire and hurt you. so that I definitely want to see that. And so, you know, what kind of due diligence? It's different every place I've gone. Right now I'm in gap accounting, you know, just stress because we've had to switch from, from regular accounting to Gap accounting for a particular crowdfunding model that we're working on right now. And it's just, you know, it's just not, it's not in alignment with our business. So we've had to do some, you creative accounting in order to get the message across and not lose the financials that we built in another model. So, you know, it's going to be different for each one. You need to be prepared for that. And, you know, when you know your numbers, when you've got, you know, good accountants working with you, or you're doing it yourself, which is in the case of what I did for most of the time, you know, you have to know what you're doing to be able to address that. Presenting financials, they like to see it in really specific ways. Each one is different, though. I do find VCs like a specific one. Angel likes a different one. So just, you know, making sure that you're some reviews are different everywhere. That's important to understand and go to an expert who knows how to present. I always have someone who's sort of my, my, my person does the intro intros, the investor relations person, and his job is to figure it out and find out what they want. And then I'll produce that version of it. As far as pitching goes, I mean, this is it. You're, if you're in this Rizzy Community, you're creatives. If you're not being creative in your pitching, you're doing something wrong. Right. So there should be tremendous energy, tremendous confidence. That's what I find, like, is easy. People like what I've, my business plan as much as they like my pitch deck. And the reason they do is because they feel like I'm talking to them. So if they feel like I'm telling the story, I've got the energy, I've got the confidence, and that story is coming through my slides as well as through my business plan. And I've dumbed it down, but not in a, in a, like a pedantic way, like I'm, you know, I've just like, you know, made this super simple, but I've given it so that you don't have to be an industry expert to understand the technology languaging. that's helpful. They get it. They hear the story of it. They understand the marketability of it. And then, you know, to be honest, like my strong student, of course, is making sure that things are really visually strong so that when there is a, you know, when you have a message, the visual impact of a chart, of a, of a, of an image, anything that I might use on that page is reinforcing the message I want to send. So those things all work in a favorite shorter is better. the other thing I found is that unless you're doing like a pitch fest, like you're at, you know, at one of these things where you've got your stuff up on the screen, white background on everything, because a lot of investors will print them out, take them home over the weekend, read them through, and then decide who they're going to meet with. So, you know, lots of ink use because you put too much colors into your, into your graphics or too much colors into the background images on your slides can be harmful. So, so I have one that I use on screen and one that I use. and send out to people so that they can print it if they choose.

Okay. Anyone else would like to address this question?

Hina, can I jump in for one minute? I'm not on the investing side, but I've sat in on a lot of these pitch events where there's a lot of, you know, the pitch events where the investors are sitting. And what I think resonates with a lot of them is especially for short format, they want to see, the number one thing they want to see is that there's a significant profit margin. And whatever you're doing, the investors are looking for a profit margin. They're going to be less inclined to look at you if what you're doing has a very high, you know, expense to cost ratio. If there's, if you can figure out a way to make your product or service very profitable, have a large market, and what your market share, your current market share is of that, I think those three things, at least from when I'm sitting in there, those are the three things that, that I tend, they tend to call themselves out to me is, boy, there's a big market, they have just a small share of it, and there's a huge profit margin in what they're doing here. And that would kind of hit the light bulb for me. But maybe Wally is the angel investor here. You probably have a much better idea of what lights up the light bulb for you?

Yeah, pitching tips, I think for me the most important thing is just be confident, even if you don't know what you're doing. Because we can see it, like another thing is, I mean from my experience, female founders find it difficult asking for the money. You know, I was in a pitch session with a with a founder. She's other, like, grad and all that. But she. She spoke for, like, 25 minutes. She never mentioned how much she was. She was asking for. I have to stop by, like, wait, is this a meat and greet? Like, are you gonna ask me for the money? You know? So I think, first off, that should be the first objective of the meeting. Let them understand. Oh, I'm here to pitch. I'm asking for five hundred thousand dollars, like. because that's very important to me, you know. So, yeah, and when it comes to due diligence, I thought, I think I've even nailed it, you know. You know, we, due diligence is very key for us. And one very important strategy we use is, you know, we do reference check, you know, if you say you have customers and all that, you know, most times, okay, so I'll share this story. So there was this guy who was preaching with me. He was telling me about his past experiences and as an entrepreneur and all that. And he mentioned that he started. He worked on a company, right? On Montreal, I was Googling the company and I checked the. The team. I couldn't find his name. I mean, it was a global village, so some of these things, I don't need to go. stevens to help me do background check and all that. I could search online, you know, and I, and I told him, so you said you did this? How come your name is not part of the team? I was like, ah, I don't know what happens to that, you know, for me, that was a big, it was a big asterisk. So it's very, very important that, you know, whatever you're telling the investor, you, you know that if they might likely check it, if they know what they're doing, they would have to check it. And then for me, meeting face to face is also very key. I used to work with a VC in downtown Dallas, where the GP always make it a point of contact to travel down to the place of business, check whatever you're doing. So you're in a garage, it will check everything out. I used to think that was crazy, but now I know better, you know, because, you know, we live in a digital world now where everything can be done online and all that. But if you're gonna be getting my money on that. my investors, I'm going to visit your physical location.

Great. So we're a little bit running over time here. We're going to take one last question for Stephen, and then we're going to wrap up. So this question for Stephen is.

From.

Todd, and actually Todd is also friend with Trissy and Tom. It's a wonderful, wonderful alumni friendship that I experienced directly. I'm very grateful to that. So, Stephen, could you tell us about the lifespan of IP and the patents?

Sure. Can you hear me? I think my connection dropped out for a minute.

So, yes, we can hear you.

So, yes, for patents, once you file for an application, if it's eventually allowed, your patent could last for as long as 20 years from the application date.

There are.

Maintenance fees to be paid during that time. After issue, there's a maintenance fee every roughly every four years that you need to paid to the US Patent Office to maintain that. Trademarks can last forever. So if you have a trademark and it's your kind of one of your core IP assets, as long as you continue using that trademark, it can last forever. You have Coca-Cola, the Ford Motor Company, all of those companies have been in business for 100 years plus. And that IP only grows more valuable the longer that you use it consistently and extensively across the board. Copyright, which is kind of a smaller part of the IP, can also last not indefinitely, but it's usually the life of the author plus 25 years. So, copyright can be a fairly lengthy lifespan with that.

Great. I want to say thank you so much everyone for attending today. I hope this was informative and helpful, very inspiring. I find it very inspiring. If you have ideas for future events or would like to be involved with the RISD Venture Committee or the RISD Founders and Entrepreneurs affinity group, please contact the alumni office and they will connect you with us. And I wanted to let all of you know that we will host our second RISD Pitch Event. and you can see the screen. This is how you could get involved with us. And now very exciting is that we will host our second Riz Dibie event on October 21st this year. And we're also looking for founders to present their business pitch and experience the founder investor panelists. Our curated judges to give feedback at the third Rizdipitch event, which will be in March next year. If you are interested, please fill out the application form. The link is in the chat. We will also be sending this form out in future emails. So if you are not already on our mailing list, I recommend you sign up. The link is also in the chat. Thank you so much everyone and special thanks to our panelists and hope you all enjoyed today's session and also develop friendship from here. It is a lovely conversation with all of you and have a great evening. Look forward to seeing you in the future.

Thank you, Hina.

Thank you and have a good night.

Thank you everyone.

Thank you. Bye guys.